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Jorge Borrego
Finance 325 Week 5
Mergers and Acquisitions Paper
Instructor: John Carroll
The University of Phoenix
August 27, 2007
Mergers and Acquisitions
The impact of mergers and acquisitions on business has seen a change on the way mergers were conducted in prior years before legislators put a stop on some companies that were merging due to change in the economy, technology and for a change of management of the firm. The reasons business are acquiring other companies are for dubious and sensible reasons that can be beneficial for share holders, but not only that, there is strong belief among corporate management that and an acquisition or a merger is going to yield a great amount of revenue and be better competitors against other firms. The benefits from Mergers and Acquisitions can be complimentary to each other, since Mergers? are categorized as horizontal merger, vertical merger, and as a conglomerate merger ?( Braeley, 2004).
A successful merger can achieve the take over of another firm by the means of purchasing another firm to combine assets and form a new firm. When an acquisition occurs, the new owners take over the owner ship and the company management. By merging companies the savings can be substantially in the matters of combining common assets and eliminating jobs positions that have similar functions to save cash. This way the firms combine strength to produce more units and lower the cost of producing.
If the merger succeeds, investors can be rewarded with bigger returns on their investment, on the other hand if the acquisition or merger did not work out for bot ...